Rules of The Stock Market Game Program



Economics: Stock Market Project Fall 2010

Important Dates:

✓ 10/11—Stock market simulation begins

✓ 12/14—Stock market simulation ends

✓ First week of January—Stock market portfolio due, presentations start

|10/12 |

|10/19 |

|10/26 |

|11/2 |

|11/9 |

|11/16 |

|11/30 |

|12/7 |

|12/14 |

Project Requirements:

Each group must create and maintain a stock portfolio with all of their investment information.

✓ Your Portfolio must be bound, neatly presented & include the following sections:

1. Weekly Journals (Group)—each week your group must hold a meeting to discuss your progress during the simulation. Your group will include these nine journals in the portfolio.

▪ Each week you must also print out the Account Summary and Account Holding Screens!

2. Stock Data Record Sheets (Group)—Keep up to date records on all of your investments using the Stock Data Record Sheet.

▪ You must track your stock value at least once a week.

3. 1 Graph (Group) showing the change in the overall value of the portfolio during the simulation.

The weekly graphs that your “charter” kept will then be transformed into this final graph

4. Research (Individual)—Each student in the group must research a different stock or mutual fund that your group owns.

Create a brief company profile (copy and paste the information into a WORD document)

Include a summary of the following 4 categories:

▪ Company's products

▪ Where it operates (city and state, or country)

▪ Strengths and weaknesses - especially in comparison to competitors

▪ 1 Clipping about stock or mutual funds in your portfolio from the past year - These can be newspaper clippings, Internet news articles, magazine ads or articles, etc.

5. A typed reflection on your stock market experience (Individual)

▪ Each student must write a report answering these questions:

▪ What investment strategy did your team follow? Why?

▪ What influenced your transactions?

▪ How did current events influence your trading activities or impact your stated strategy?

▪ What is your overall reaction to the success or lack of success of the overall value of the team’s investment portfolio?

▪ What did you learn during this simulation?

|Stock Market Portfolio RUBRIC |Point |Points Earned|Comments From Teacher |

| |Value | | |

|Presentation: GROUP GRADE |

|Project is Bound & Neatly Presented (grammar, spelling all ok) |50 | | |

|50 POINTS POSSIBLE ________ |

|PART 1: Maintain Weekly Journals—GROUP GRADE |

|Your group will need 9 journals for 9 different weeks |90 | | | |

|9 printed Account Summaries & Account Holdings screens—Print every Friday (or weekend) after|90 | | | |

|the close of market. | | | | |

|180 POINTS POSSIBLE ________ |

| |

|PART 2: Maintain Stock Data Record Sheets for the groups’ holdings—GROUP GRADE |

|Include all of your Stock Data Record sheets |50 | | | |

|50 POINTS POSSIBLE ________ |

| |

|PART 3: 1 GRAPH—Using Excel create a graph showing the change in the overall value of the portfolio during the simulation—GROUP GRADE |

|Create a graph based on the team’s Weekly Portfolio Value—each week how much was portfolio |50 | | | |

|worth. | | | | |

|50 POINTS POSSIBLE ________ |

| |

|PART 4: RESEARCH—INDIVIDUAL GRADE—Each group member needs to research one of the stocks or mutual funds that your group owns. |

|Include a summary of: (copy and paste the information into a word document) |20 | | | |

|Company’s products | | | | |

|Where it operates | | | | |

|Strengths and weaknesses - especially in comparison to competitors | | | | |

|For Mutual Funds research each mutual fund investments, including information about the fund| | | | |

|management, types of securities it emphasizes, past and projected returns, etc. | | | | |

|Clippings about stock or mutual funds in your portfolio - These can be newspaper clippings, |20 | | | |

|Internet news articles, magazine ads or articles, etc. (must have at least 1 clipping for | | | | |

|each stock/fund held) | | | | |

|40 POINTS POSSIBLE ________ |

| |

|PART 5: CONCLUSION —2 page typed double spaced reflection on your stock market experience—INDIVIDUAL GRADE |

|What investment strategy did your team follow? Why? | | | |

|What influenced your transactions? | | | |

|How did current events influence your trading activities or impact your stated strategy? | | | |

|What is your overall reaction to the success or lack of success of the overall value of the | | | |

|team’s investment portfolio? | | | |

|What did you learn during this simulation? | | | |

|Spelling and Grammar of the reflection | | | |

|30 POINTS POSSIBLE ________ |

|Participation (given by teacher and group members) |

|-INDIVIDUAL GRADE 50 POINTS POSSIBLE ________ |

|Grand Total: _________________/450 Points |

Part 1: SMG Journals—need 9 journals for the portfolio!

Go to the website to print all of your copies, take this one to the library to make copies, or re-create your own

(GROUP ASSIGNMENT)

|Name of Team and Team | |

|Members: | |

|Log-in+ Password | |

|(you only need to write this on the | |

|first journal) | |

|Date and Location | |

|Purpose of | |

|Group Meeting: | |

|New Business: | |

|-Current Account | |

|Values/Changes | |

|-Related News | |

|Events | |

| | |

|Questions | |

|-Questions about different companies. | |

|-Questions need to ask the teacher. | |

| | |

|Analysis of current holdings: | |

|-Should we keep our stocks? | |

|-Is our portfolio diversified? | |

|Decisions Made/Reasons for | |

|Decisions | |

|-Who is buying and/or selling stocks | |

|this week? | |

|Final Reflections: | |

|-What do we need to do next? | |

| | |

| | |

| | |

| | |

Part 2: Stock Data Record Sheet (GROUP Assignment)

Part 3: Graph of overall value (GROUP Assignment)

Step 1: Create the following table in Excel—using your values for total equity this information is on the Account Summary Screen!

|Week |Total Equity—EXAMPLE |

|10/12 |$101,123 |

|10/19 |$97,165 |

|10/26 |$99,234 |

|11/2 |$100,238 |

|11/9 |$95,104 |

|11/16 |$103,176 |

|11/30 |$105,987 |

|12/7 |$106,334 |

|12/14 |$107,755 |

Step 2: Make a line chart showing how the overall value of your portfolio changed during the simulation!

[pic]

You must include the TYPED table and graph in your portfolio!

Partner Evaluation Sheet

Please rank yourself and your partners on the following criteria. This form will be returned directly to the teacher: no one else will be able to read it. In order for this tool to be valuable to everyone, you must be honest so that each member gets the grade he or she deserves for the efforts put into the project. Participation will be worth 50 points of each person's grade.

Your Name: _______________________ Period: _________

1. Give a brief explanation for your best efforts in helping your team with the Stock Market Game.

On a scale of 1 - 10 (10 being the best), how much effort did you make to help the group with The Stock Market Game? Score = ________

__________________________________________________________________________________

2. Give a brief explanation of (name of person evaluated) ___________________________________ best efforts in helping your team with the Stock Market Game.

On a scale of 1 - 10 (10 being the best), how much effort did ___________________ make to help the group with The Stock Market Game? Score = ________

__________________________________________________________________________________

3. Give a brief explanation of (name of person evaluated) ___________________________________ best efforts in helping your team with the Stock Market Game.

On a scale of 1 - 10 (10 being the best), how much effort did ___________________ make to help the group with The Stock Market Game? Score = ________

__________________________________________________________________________________

OFFICIAL Rules of The Stock Market Game Program

1. Each team begins the simulation with $100,000 in cash and may borrow additional funds. How much you may borrow is dependent upon the equity in your account. Interest is charged weekly on negative cash balances at an annual rate of 7.00%, and credited weekly on positive cash balances at an annual rate of 2.00%. Interest is calculated daily, then summed for the week (Saturday through Friday) and posted on the following Tuesday. The daily rate is based upon a 365 day year. Daily Interest = Cash * Appropriate Interest Rate(as a decimal) / 365. Bond coupon payments will be posted when due.

2. You may trade only stocks and mutual funds listed on the American Stock Exchange, Nasdaq Stock Market and the New York Stock Exchange that have traded within the last 7 days. Canadian stock traded on these exchanges will be priced within these markets but the current value is calculated using Canadian exchange prices adjusted using the current exchange rate for the American dollar equivalent. Some competitive regions may also trade a pre-determined group of Municipal, Corporate, and Treasury bonds.

3. End of Day Game transactions are priced at market daily closing prices. These prices can be found in the next day's newspaper or by using the price quote facilities of SMG. Real Time Game transactions are priced at the market price at the time of entry. Bond prices are available only on the SMG website.

All Mutual Fund transactions are treated as real time transactions and priced at the previous day's closing price. This applies to both End of Day and Real Time games.

Transactions entered with a limit price will not be held past the initial attempt to price the transaction. This applies to both the End of Day or Real Time Games.

4. All Stock and Mutual Fund buy orders must be a minimum of 100 shares. Sell for Stocks and Mutual Funds orders for less than 100 shares will be permitted. Municipal and Corporate Bond orders must be bought and sold in $1000 increments only. Treasury Bonds must be bought and sold in $100 increments only.

5. SMG does not permit buying stocks or mutual funds that trade below $5 per share. Such orders will be rejected. Sell transactions for existing long positions where transactions are executed at closing or real time prices will be accepted, even if the price is less than $5.00 per share. (There are a number of reasons for this rule. Low priced stocks, known as penny stocks, are very risky and volatile investments. Accordingly, brokers will not permit their customers to trade such securities on margin, just as SMG does not. Also, penny stocks tend to have very shallow markets and their prices move sharply with large orders, unlike SMG where transactions are executed at closing or real time prices regardless of order size). Only Bonds provided by SMG may be bought and sold. These bonds will be investment grade only with S&P ratings of "BBB" or higher.

6. Trades can only be processed in whole and will be rejected if sufficient buying power does not exist to execute the entire order.

7. A 2% broker's fee is charged for all transactions. For example, if you buy 100 shares of a stock at $10 per share, you must pay the 2% of $1000 or $20. On Sell or Shortsell transactions an SEC fee of $5.60 per million gross rounded to the nearest penny is also charged. Bond buyers will also be charged for accrued interest since the last coupon payment. Bond sellers will receive accrued interest since the last coupon payment.

8. The Game is run Monday through Friday. Teams may trade on any day the participating stock markets are open. Orders may be entered 7 days a week during hours the system is available.

9. Trades entered after close of market (4:00 PM ET) will be priced at next day's closing price for the End of Day Game and at opening price for the Real Time Game. Bonds, however, can trade from 12 midnight through 11pm (ET) 7 days a week during the hours the system is available. Mutual Funds are always treated as real time trades but priced at the last closing price.

10. Teams do not have to liquidate their portfolios at the end of The Game. Winners will be determined on the basis of either equity or the % return above/below S&P 500 Growth. (Some states may use additional criteria to determine winners).

Short sell/short cover rules

11. All short sell orders must be for a minimum of 100 shares. Short cover orders for less than 100 shares will be permitted. Open ended mutual funds can not be short sold. Held short sell positions are marked to the market daily and the resulting gain or loss is added or subtracted from cash. No mark to market transactions are posted in transaction history.

12. SMG does not permit short sells on stocks or mutual funds that trade below $5.00 per share. Such orders will be rejected. Short cover transactions for existing short positions will be accepted, even if the price is less than $5.00 per share. (See Rule #5 for an explanation). Mutual Funds and Bonds can not be short sold.

Portfolios

13. A record of a team's portfolio and transactions will be available daily. A team will not receive a portfolio nor be listed in regional rankings until its initial transaction is entered successfully. A student can only be assigned to ONE portfolio per game period.

14. No back posting of trades will be done for trades of securities not contained within the SMG Security Table. Once the missing security has been added to the Security Table the security can then be traded. The same rule applies to trades rejected if they are incorrectly pricing below $5. Once the pricing has been corrected the security can be traded. Only Bonds listed in the SMG can be traded. No post dating of trades due to the system being unavailable.

15. Stock and cash dividends and stock splits are automatically computed into portfolios. Every effort is made to simulate as closely to real life as possible a variety of other corporate actions (mergers, acquisitions, spinoffs, etc.), which may include the standard three-day settlement period. In this case, it may be necessary to suspend trading of a given security until the action can be completed. Canadian stocks trading on US exchanges cannot be traded between a split's record date and its payout date. It is the responsibility of teams to check their portfolios for accuracy and notify their Coordinator by email of any problems that are encountered.

16. Participants of the end of day pricing game may delete pending transactions prior to market close except in the case of Mutual Funds and Bonds which are processed as real time orders.

Additional rules

17. Any violation of the rules of the SMG may result in the invalidation of a transaction. Repeated violation of the rules may result in the disqualification of a team.

18. Additional rules have been developed in some states and, if applicable, have been included in your Coordinator's Information Page. It is the responsibility of your team to learn and abide by all rules.

19. You must maintain a total equity position that is greater than or equal to 30% of the current value of your current holdings. If you don't you will receive a margin call.

Code of participation

1. SMG advisors must be responsible adults 18 years of age or older. In no case may they be a matriculated student in grades K-12.

2. SMG advisors will ensure that every participant on their team(s) has read and understands the SMG Rules and the Code of Participation.

3. Teams that do not comply with the SMG Code of Participation will be removed from the portfolio rankings.

4. The authority to remove a team from the rankings lies solely with the team's SMG coordinator organization.

5. Each team is responsible for any opening or closing transactions entered into its portfolio.

6. Teams may not enter transactions into portfolios other than their own. (Please note that when a team asserts that a transaction was entered by a non-member of that team, the team will nevertheless be ranked based on their portfolio's total equity, which will include the challenged transaction.)

7. Only transactions stored on the SMG database will be recognized for purposes of evaluating portfolio total equity. Teams are responsible for maintaining the secrecy of their portfolio password.

8.FIE will be responsible for the accuracy of the market data. It is the responsibility of teams to report any major price discrepancies found in their portfolios. Failure to do so may result in disqualification from the competition. In extreme cases of continued disregard for this rule, FIE reserves the right to delete teams from the game. If a team believes a stock price or other information is incorrect, the team advisor shall notify their Coordinator by email.

9. In the event of an error on the part of FIE and/or coordinator organization(s), their liability to a participant shall be limited to the refund of registration or other fees paid.

Your Local Rules for the Stock Market Game

1. Teams may not invest more than 30% of their total equity multiplied by 2 in any one company. If a stock in a team portfolio increases in value and places the investment beyond 30% of their total equity multiplied by 2, they will be able to retain their shares but unable to purchase additional shares of that stock. This is called the Maximum Equity Rule. The SMG system will automatically enforce this rule to encourage diversity in team portfolios.

2. Teams do not need to liquidate their holdings at the end of the game. In fact, transactions cannot be entered after the markets close on the next-to-last day of the session so teams will not lose the 2% commissions on trades for which the prices will not change.

3. Rankings will be based on teams’ total equity in relation to the current value of the S&P 500 and will be calculated daily. Rankings are viewed as a percentage either above or below the S&P 500 value.

There will be an individual quiz on these rules, so make sure you study them!

-----------------------

|RESEARCH (Look this up on the internet before you buy the stock) |

|Stock Name | | | | | | |

|Ticker | | | | | | |

|Date | | | | | | |

|Last Trade | | | | | | |

|Day's Range | | | | | | |

|52 Week Range | | | | | | |

|Volume | | | | | | |

|PURCHASE (About 24 hours after you purchase stock—open up your account on SMG and see how much you were charged for your stock this information can be |

|found in the Transaction History) |

|Date Purchased | | | | | | |

|# Shares Purchased | | | | | | |

|Cost Per Share | | | | | | |

|Fees & Commission (2% of purchase) | | | | | | |

|Net Amount—total for the entire | | | | | | |

|purchase (All shares + Fees) | | | | | | |

|SALE (Do NOT sell your stocks on the last day or else you will be charged a 2% broker fee.) If you do not sell the stock you may leave this section |

|blank. Use the Gain & Losses Screen to fill out this section. |

|Date Sold | | | | | | |

|# Shares Sold | | | | | | |

|Net Sale Price | | | | | | |

|Proceeds | | | | | | |

|Net Sale Price/Share | | | | | | |

|(Net Proceed / # of shares) | | | | | | |

|Gains/Losses | | | | | | |

|TRACKING DATES—Every week you need |Price per |Total Value of|Price per |Total Value of |Price per |Total Value of|Price per |Total Value of|

|to check the value of your stock |Share* |all the |Share* |all the |Share* |all the |Share* |all the |

|(if you still own it). | |shares** | |shares** | |shares** | |shares** |

|10/12 | | | | | | | | |

|10/19 | | | | | | | | |

|10/26 | | | | | | | | |

|11/2 | | | | | | | | |

|11/9 | | | | | | | | |

|11/16 | | | | | | | | |

|11/30 | | | | | | | | |

|12/7 | | | | | | | | |

|12/14 | | | | | | | | |

|*Unit value per share **Total Value (Price per share X number of the shares you own) |

|Note: "Net" value includes 2% broker's fees (commissions). | | | | |

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